Resolute Holdings Management, Inc.

Previous wording

In connection with the completion of the Spin-Off, Resolute Holdings entered into a management agreement with CompoSecure Holdings (the “CompoSecure Management Agreement”), pursuant to which Resolute Holdings is responsible for managing the day-to-day business and operations and overseeing the strategy of CompoSecure Holdings and its controlled affiliates. Due to the execution of and the terms of the CompoSecure Management Agreement, Resolute Holdings (and together with CompoSecure Holdings, the “Company”) is required to consolidate CompoSecure Holdings for financial reporting purposes. Resolute Holdings does not own any equity interests or common stock in CompoSecure Holdings or CompoSecure.

Current wording

In connection with the completion of the Spin-Off, Resolute Holdings entered into a management agreement with CompoSecure Holdings (the “CompoSecure Management Agreement”), pursuant to which Resolute Holdings is responsible for managing the day-to-day business and operations and overseeing the strategy of CompoSecure Holdings and its controlled affiliates. Due to the execution of and the terms of the CompoSecure Management Agreement, Resolute Holdings is required to consolidate CompoSecure Holdings for financial reporting purposes.

Previous wording

Pursuant to the CompoSecure Management Agreement, CompoSecure Holdings will pay Resolute Holdings a quarterly management fee (the “CompoSecure Management Fee”), payable in arrears, in a cash amount equal to 2.5% of CompoSecure Holdings’ last 12 months’ Adjusted EBITDA, measured for the period ending on the fiscal quarter then ended, as defined in the

Current wording

Pursuant to the CompoSecure Management Agreement, CompoSecure Holdings pays Resolute Holdings a quarterly management fee (the “CompoSecure Management Fee”), payable in arrears, in a cash amount equal to 2.5% of CompoSecure Holdings’ last 12 months’ Adjusted EBITDA, as defined in the Management Agreement, measured for the period ending on the fiscal quarter then ended (“Management Agreement Adjusted EBITDA”). Management Agreement Adjusted EBITDA reflects a)

Previous wording

CompoSecure Management Agreement (“Management Agreement Adjusted EBITDA”). CompoSecure Holdings is also required to reimburse Resolute Holdings and its affiliates for Resolute Holdings’ documented costs and expenses incurred on behalf of CompoSecure Holdings other than those expenses related to Resolute Holdings’ or its affiliates’ personnel who provide services to CompoSecure Holdings under the CompoSecure Management Agreement. Resolute Holdings will determine, in its sole and absolute discretion, whether a cost or expense will be borne by Resolute Holdings or by CompoSecure Holdings.

Current wording

CompoSecure Holdings’ earnings before interest, taxes, depreciation, depletion and amortization, extraordinary losses and expenses, one-time and non-recurring expenses, and the CompoSecure Management Fee, less b) CompoSecure’s selling, general and administrative expenses, adjusted for the same items above (“Parent Allocated Expense”, as defined in the CompoSecure Management Agreement). CompoSecure Holdings is also required to reimburse Resolute Holdings and its affiliates for Resolute Holdings’ documented costs and expenses incurred on behalf of CompoSecure Holdings other than those expenses related to Resolute Holdings’ or its affiliates’ personnel who provide services to CompoSecure Holdings under the CompoSecure Management Agreement. Resolute Holdings will determine, in its sole and absolute discretion, whether a cost or expense will be borne by Resolute Holdings or by CompoSecure Holdings.

Previous wording

The Company’s net sales for the quarter ended March 31, 2025 decreased $0.1 million to $103.9 million compared to $104.0 million for the quarter ended March 31, 2024. The decrease was driven by a decline in domestic sales in CompoSecure Holdings’ premium payment card business, which was down 4%, offset by international sales which were up 28%.

Current wording

The Company’s net sales for the quarter ended June 30, 2025 increased $11.0 million to $119.6 million compared to $108.6 million for the quarter ended June 30, 2024. The increase was driven by an increase in domestic sales in CompoSecure Holdings’ premium payment card business, which was up 22%, offset by international sales which were down 35%.

Previous wording

International: The Company’s international net sales for the quarter ended March 31, 2025 increased $3.1 million, or 28%, to $14.4 million compared to $11.2 million for the quarter ended March 31, 2024. CompoSecure Holdings’ international customer base is comprised of a larger population of smaller customers compared to the domestic customer base. There were increased sales across the customer base driving growth in net sales during the quarter ended March 31, 2025.

Current wording

International: The Company’s international net sales for the quarter ended June 30, 2025 decreased $8.1 million, or 35%, to $15.3 million compared to $23.4 million for the quarter ended June 30, 2024. CompoSecure Holdings’ international customer base is comprised of a larger population of smaller customers compared to the domestic customer base. The timing of certain customer orders negatively impacted sales compared to the quarter ended June 30, 2024.

Previous wording

The Company’s operating expenses increased $6.2 million, or 27%, to $28.9 million for the quarter ended March 31, 2025 compared to $22.8 million for the quarter ended March 31, 2024. The increase was primarily due to incremental salaries and equity based compensation expense from hiring employees at Resolute Holdings.

Current wording

The Company’s operating expenses increased $5.5 million, or 24%, to $28.2 million for the quarter ended June 30, 2025 compared to $22.7 million for the quarter ended June 30, 2024. The increase was primarily due to incremental salaries and equity based compensation expense from hiring employees at Resolute Holdings.

Previous wording

Income from operations for the quarter ended March 31, 2025 decreased $6.8 million, or 21%, to $25.6 million compared to $32.4 million for the quarter ended March 31, 2024. The decrease was primarily attributable to an increase in operating expenses. Operating margin for the quarter ended March 31, 2025 decreased by 5%, to 26%, compared to 31% for the quarter ended March 31, 2024. The decrease in operating margin was primarily attributable to the increase in operating expenses described above.

Current wording

Income from operations for the quarter ended June 30, 2025 increased $7.2 million, or 22%, to $40.6 million compared to $33.4 million for the quarter ended June 30, 2024. The increase was primarily attributable to an increase in revenue, partially offset by higher operating expenses. Operating margin for the quarter ended June 30, 2025 increased by 3%, to 34%, compared to 31% for the quarter ended June 30, 2024. The increase in operating margin was primarily attributable to the increase in gross margin, partially offset by higher operating expenses.

Previous wording

Other expense for the quarter ended March 31, 2025 decreased $3.6 million, to $2.4 million, compared to $6.1 million for the quarter ended March 31, 2024. The decrease in other expense was primarily due to lower interest expense as a result of the Exchangeable Notes being exchanged and extinguished.

Current wording

Other expense for the quarter ended June 30, 2025 decreased $3.4 million, to $2.0 million, compared to $5.5 million for the quarter ended June 30, 2024. The decrease in other expense was primarily due to lower interest expense as a result of the Exchangeable Notes being exchanged and extinguished during the fourth quarter of 2024.

Previous wording

The Company’s income tax expense for the quarter ended March 31, 2025 was $0.6 million compared to $0.0 million for the quarter ended March 31, 2024 due to Resolute Holdings being taxed as a corporation compared to CompoSecure Holdings as a pass-through entity in the prior period.

Current wording

The Company’s income tax expense for the quarter ended June 30, 2025 was $0.3 million compared to $0.0 million for the quarter ended June 30, 2024 due to Resolute Holdings being taxed as a corporation compared to CompoSecure Holdings as a pass-through entity in the prior period.

Previous wording

The following table presents the Company’s results of operations by reportable segment for the three months ended March 31, 2025:

Current wording

The following table presents the Company’s results of operations by reportable segment for the three and six months ended June 30, 2025:

Previous wording

prior to execution of the Management Agreement, c) one-time Spin-Off related costs, less the net tax impact of such adjustments at Resolute Holdings’ expected tax rate of 31%. The Company believes that these non-GAAP financials represent the best presentation regarding the performance of the Company that is attributable to Resolute Holdings common stockholders. Fee-Related Earnings and Fee-Related Earnings per share should not be considered as measures of financial performance under U.S. GAAP, and the items excluded from Fee-Related Earnings and Fee-Related Earnings per share are significant components in understanding and assessing the Company’s financial performance. Accordingly, these key business metrics have limitations as an analytical tool. They should not be considered as an alternative to net income or any other performance measures derived in accordance with U.S. GAAP or as an alternative to cash flows from operating activities as a measure of the Company’s liquidity, and may be different from similarly titled non-GAAP measures used by other companies.

Current wording

This Quarterly Report on Form 10-Q includes certain non-GAAP financial measures that are not prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and that may be different from non-GAAP financial measures used by other companies. The Company believes Fee-Related Earnings and Fee-Related Earnings per share are useful to investors in evaluating the Company’s financial performance. Fee-Related Earnings is calculated based on net income (loss) attributable to common stockholders of Resolute Holdings, and adding back a) equity-based compensation under the CompoSecure Equity Plan, b) Management Fees for the period during which expenses were incurred from Jan 1, 2025 until February 27, 2025 but prior to execution of the Management Agreement, c) one-time Spin-Off related costs, less the net tax impact of such adjustments at Resolute Holdings’ expected tax rate of 31%. The Company believes that these non-GAAP financials represent the best presentation regarding the performance of the Company that is attributable to Resolute Holdings common stockholders. Fee-Related Earnings and Fee-Related Earnings per share should not be considered as measures of financial performance under U.S. GAAP, and the items excluded from Fee-Related Earnings and Fee-Related Earnings per share are significant components in understanding and assessing the Company’s financial performance. Accordingly, these key business metrics have limitations as an analytical tool. They should not be considered as an alternative to net income or any other performance measures derived in accordance with U.S. GAAP or as an alternative to cash flows from operating activities as a measure of the Company’s liquidity, and may be different from similarly titled non-GAAP measures used by other companies.

Previous wording

Critical accounting policies are detailed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 and reference is made to Note 2 of Notes to Financial Statements – unaudited in Item 1, “Financial Statements”.

Current wording

Critical accounting policies are detailed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 and reference is made to Note 2 of Notes to Financial Statements – unaudited in Item 1, “Financial Statements”. Critical accounting policies adopted since the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 include the following:

Previous wording

Resolute Holdings’ primary sources of liquidity are its existing cash and cash equivalents balances, cash flows from operations and borrowings on the Resolute revolving credit facility. CompoSecure Holdings’ primary sources of liquidity are its existing cash and cash equivalents, cash flows from operations, and borrowings on the CompoSecure Holdings term loan and revolving credit facility as detailed in Note 8 of Notes to Financial Statements – unaudited in Item 1, “Financial Statements”. The Company’s primary cash requirements at Resolute Holdings and CompoSecure Holdings include operating expenses, debt service payments (principal and interest), and capital expenditures (including property and equipment and software).

Current wording

Resolute Holdings’ primary sources of liquidity are the CompoSecure Management Agreement, its existing cash and cash equivalents balances, and borrowings on the Resolute revolving credit facility. CompoSecure Holdings’ primary sources of liquidity are its existing cash and cash equivalents, cash flows from operations, and borrowings on the CompoSecure Holdings term loan and revolving credit facility as detailed in Note 8 of Notes to Financial Statements – unaudited in Item 1, “Financial Statements”. The Company’s primary cash requirements at Resolute Holdings and CompoSecure Holdings include operating expenses, debt service payments (principal and interest), and capital expenditures (including property and equipment and software).

Previous wording

As of March 31, 2025, the Company had cash and cash equivalents of $71.0 million, consisting of $8.8 million at Resolute Holdings and $62.2 million at CompoSecure Holdings. The Company had debt principal outstanding of $195.0 million at CompoSecure Holdings. As of December 31, 2024, the Company had cash and cash equivalents of $71.6 million and total debt principal outstanding of $197.5 million, all at CompoSecure Holdings.

Current wording

As of June 30, 2025, the Company had cash and cash equivalents of $99.9 million, consisting of $8.2 million at Resolute Holdings and $91.7 million at CompoSecure Holdings. The Company had debt principal outstanding of $192.5.million at CompoSecure Holdings. As of December 31, 2024, the Company had cash and cash equivalents of $71.6 million and total debt principal outstanding of $197.5 million, all at CompoSecure Holdings.

Previous wording

On February 28, 2025, Resolute Holdings entered into a credit agreement with JPMorgan Chase Bank, N.A (“JPMC”)., as lender (the “Resolute Credit Agreement”). The Resolute Credit Agreement provides for a $5.0 million loan through a senior secured revolving credit facility available to be used by Resolute Holdings. The revolving credit facility matures on May 31, 2026. Borrowings of the revolving loans shall bear interest at a fluctuating rate per annum equal to, at the option of Resolute Holdings, (i) a rate equal to the higher of (a) the rate of interest last quoted by the Wall Street Journal as the prime rate in the U.S. or (b) 2.5% or (ii) a Term SOFR based benchmark rate for the applicable interest period (provided that in no event shall such Term SOFR rate be less than 0.00% per annum) plus an applicable margin of 2.25%. The terms of the revolving credit facility impose financial covenants, measured at the Resolute Holdings legal entity level, including a minimum liquidity ratio, a minimum revenue requirement and, beginning with the fiscal quarter ending March 31, 2026, a minimum leverage ratio which shall not be greater than 1.50 to 1.00 on the last day of any fiscal quarter. No amounts were drawn on the Resolute Holdings revolving credit facility as of March 31, 2025. As of March 31, 2025, Resolute Holdings met the covenants of the Resolute Credit Agreement.

Current wording

On February 28, 2025, Resolute Holdings entered into a credit agreement with JPMorgan Chase Bank, N.A (“JPMC”)., as lender (the “Resolute Credit Agreement”). The Resolute Credit Agreement provides for a $5.0 million loan through a senior secured revolving credit facility available to be used by Resolute Holdings. The revolving credit facility matures on May 31, 2026. Borrowings of the revolving loans shall bear interest at a fluctuating rate per annum equal to, at the option of Resolute Holdings, (i) a rate equal to the higher of (a) the rate of interest last quoted by the Wall Street Journal as the prime rate in the U.S. or (b) 2.5% or (ii) a Term SOFR based benchmark rate for the applicable interest period (provided that in no event shall such Term SOFR rate be less than 0.00% per annum) plus an applicable margin of 2.25%. The terms of the revolving credit facility impose financial covenants, measured at the Resolute Holdings legal entity level, including a minimum liquidity ratio, a minimum revenue requirement and, beginning with the

Previous wording

On August 7, 2024, the CompoSecure Holdings, together with its operating subsidiaries, and CompoSecure, entered into a Fourth Amended and Restated Credit Agreement with JPMC (the “2024 CompoSecure Holdings Credit Facility” and collectively with the 2021 CompoSecure Holdings Credit Facility, the “CompoSecure Holdings Credit Facilities”) and the lenders party thereto to refinance the 2021 CompoSecure Holdings Credit Facility. The 2024 CompoSecure Holdings Credit Facility amended and restated the 2021 CompoSecure Holdings Credit Facility in its entirety. In conjunction with the 2024 CompoSecure Holdings Credit Facility, the maximum borrowing capacity of the overall credit facility was increased to $330,000 and comprised of a term loan of $200,000 (the “2024 CompoSecure Holdings Term Loan”) and a revolving credit facility of $130,000 (the “2024 CompoSecure Holdings Revolver”). At March 31, 2025, there was $195 million of total debt outstanding under the CompoSecure Holdings Credit Facilities. No amounts were drawn on the CompoSecure Holdings revolving credit facility as of March 31, 2025. Additional amounts may be available for borrowing during the term of the revolving loan, up to the full $130 million, as long as CompoSecure Holdings maintains a net leverage ratio as stipulated in the credit facility agreement. As of March 31, 2025, the CompoSecure Holdings’ net leverage ratio met the requirement for the available borrowing as defined in the terms of the credit facility agreement. The 2024 Credit Facility will mature on August 7, 2029.

Current wording

On August 7, 2024, CompoSecure Holdings, together with its operating subsidiaries, entered into a Fourth Amended and Restated Credit Agreement with JPMC (the “CompoSecure Holdings Credit Facility”). The CompoSecure Holdings Credit Facility had an initial maximum borrowing capacity of $330,000, comprised of a term loan of $200,000 (the “CompoSecure Holdings Term Loan”) and a revolving credit facility of $130,000 (the “CompoSecure Holdings Revolver”). The CompoSecure Holdings Credit Facility has a maturity date of August 7, 2029. At June 30, 2025, there was $192.5 million of total debt outstanding under the CompoSecure Holdings Credit Facility. No amounts were drawn on the CompoSecure Holdings Revolver as of June 30, 2025. Additional amounts may be available for borrowing during the term of the revolving loan, up to the full $130 million, as long as CompoSecure Holdings maintains a net leverage ratio as stipulated in the credit facility agreement. As of June 30, 2025, CompoSecure Holdings’ net leverage ratio met the requirement for the available borrowing as defined in the terms of the credit facility agreement. The CompoSecure Holdings Credit Facility will mature on August 7, 2029. CompoSecure has pledged its ownership interests in CompoSecure Holdings (representing 100% ownership) as collateral pursuant to a pledge and security agreement with the lenders under the CompoSecure Holdings Credit Facility.

Previous wording

CompoSecure Holdings’ Credit Facilities, including the 2024 CompoSecure Holdings Credit Facility, require CompoSecure Holdings to make quarterly principal payments until maturity, at which point a balloon principal payment is due for the outstanding principal. The CompoSecure Holdings Credit Facilities also require CompoSecure Holdings to make monthly interest payments as well as pay a quarterly unused commitment fee of 0.35% for any unused portion of the revolving credit facilities. The 2024 CompoSecure Holdings Credit Facility provides for CompoSecure Holdings to prepay the term loans without penalty or premium. The CompoSecure Holdings Credit Facilities are secured by substantially all assets of CompoSecure Holdings.

Current wording

The CompoSecure Holdings Credit Facility requires CompoSecure Holdings to make quarterly principal payments until maturity, at which point a balloon principal payment is due for the outstanding principal. The CompoSecure Holdings Credit Facility also requires CompoSecure Holdings to make monthly interest payments as well as pay a quarterly unused commitment fee of 0.35% for any unused portion of the CompoSecure Holdings Revolver. The CompoSecure Holdings Credit Facility provides for CompoSecure Holdings to prepay the term loans without penalty or premium. The CompoSecure Holdings Credit Facility is secured by substantially all assets of CompoSecure Holdings.

Previous wording

Interest on the CompoSecure Holdings revolving credit facilities and the term loans are based on the outstanding principal amount during the interest period multiplied by the quoted SOFR rate plus the which can range from 1.75% to 2.75% based on CompoSecure Holdings leverage ratio. The CompoSecure Holdings Credit Facilities also require the Company to make monthly interest payments as well as pay a quarterly unused commitment fee of 0.35% for any unused portion of the revolving credit facilities. The 2024 CompoSecure Holdings Credit Facility contains customary covenants, including among other things, certain restrictions or limitations on indebtedness, issuance of liens, investments, asset sales, certain mergers or consolidations, sales, transfers, leases or dispositions of substantially all of CompoSecure Holdings assets, and affiliate transactions. CompoSecure Holdings may also be required to make repayments in advance of the maturity date based on a calculation of excess cash flows, as defined in the agreement, with any required payments to be made after the issuance of CompoSecure Holdings annual financial statements. CompoSecure Holdings was in compliance with all covenants as of March 31, 2025. See Note 8 in Notes to Consolidated Financial Statements in this Quarterly Report on Form 10-Q.

Current wording

Interest on the CompoSecure Holdings Revolver and CompoSecure Holdings Term Loan are based on the outstanding principal amount during the interest period multiplied by the quoted SOFR rate plus the which can range from 1.75% to 2.75% based on CompoSecure Holdings’ leverage ratio. The CompoSecure Holdings Credit Facility also requires the Company to make monthly interest payments as well as pay a quarterly unused commitment fee of 0.35% for any unused portion of the CompoSecure Holdings Revolver. The CompoSecure Holdings Credit Facility contains customary covenants, including among other things, certain restrictions or limitations on indebtedness, issuance of liens, investments, asset sales, certain mergers or consolidations, sales, transfers, leases or dispositions of substantially all of CompoSecure Holdings assets, and affiliate transactions. CompoSecure Holdings may also be required to make repayments in advance of the maturity date based on a calculation of excess cash flows, as defined in the agreement, with any required payments to be made after the issuance of CompoSecure Holdings annual financial statements. CompoSecure Holdings was in compliance with all covenants of the CompoSecure Holdings Credit Facility as of June 30, 2025. See Note 8 in Notes to Consolidated Financial Statements in this Quarterly Report on Form 10-Q.

Previous wording

Cash provided by the Company’s operating activities for the three months ended March 31, 2025 was $18.4 million compared to cash provided by operating activities of $35.7 million during the three months ended March 31, 2024. The decrease in cash provided by operating activities of $17.3 million was primarily attributable to higher operating expenses, an increase in receivables, and a decrease in accrued expenses.

Current wording

Cash provided by the Company’s operating activities for the six months ended June 30, 2025 was $67.3 million compared to cash provided by operating activities of $71.8 million during the six months ended June 30, 2024. The decrease in cash provided by operating activities of $4.5 million was primarily attributable to an increase in receivables, partially offset by an increase in accounts payable and accrued expenses.

Previous wording

Cash used in the Company’s investing activities for the three months ended March 31, 2025 was $1.2 million primarily relating to capital expenditures of $0.6 million and capitalized software expenditures of $0.6 million, compared to cash used in investing activities for the three months ended March 31, 2024 of $1.6 million.

Current wording

Cash used in the Company’s investing activities for the six months ended June 30, 2025 was $2.8 million primarily relating to capital expenditures of $2.0 million and capitalized software expenditures of $0.8 million, compared to cash used in investing activities for the six months ended June 30, 2024 of $3.5 million.

Previous wording

Cash used in the Company’s financing activities for the three months ended March 31, 2025 was $17.8 million compared to cash used in the Company’s financing activities for the three months ended March 31, 2024 of $22.0 million. Cash used in financing activities for the three months ended March 31, 2025 primarily related to payments for taxes related to net share settlement of CompoSecure equity awards of $15.3 million and repayment of scheduled principal payments of the term loan of $2.5 million. Cash used in financing activities for the three months ended March 31, 2024 primarily related to distributions to non-controlling interests,

Current wording

Cash used in the Company’s financing activities for the six months ended June 30, 2025 was $36.2 million compared to cash used in the Company’s financing activities for the six months ended June 30, 2024 of $79.4 million. Cash used in financing activities

Previous wording

Resolute Holdings is a party to the Resolute Credit Facility and CompoSecure Holdings is a party to the 2024 CompoSecure Holdings Credit Facility with various banks. For a more complete description of the Company’s debt obligations, see Note 8 of Notes to Consolidated Financial Statements in the Consolidated Financial Statements of the Company in this Quarterly Report on Form 10-Q.

Current wording

Resolute Holdings is a party to the Resolute Credit Facility and CompoSecure Holdings is a party to the CompoSecure Holdings Credit Facility with various banks. For a more complete description of the Company’s debt obligations, see Note 8 of Notes to Consolidated Financial Statements in the Consolidated Financial Statements of the Company in this Quarterly Report on Form 10-Q.